Korean summit, US tech group results, ECB decision
The FT's Helen Barrett looks at the main stories making news this week. Including: the upcoming summit between North and South Korea; US tech results; and the ECB's monetary policy meeting
Written by Gideon Rachman, Richard Waters, Claire Jones, Simon Greaves. Produced by Daniel Garrahan and James Sandy
Hello and welcome to The Week Ahead from the Financial Times in London. Here are some of the big stories we'll be watching this week.
North and South Korea meet at the demilitarised zone between the two countries for an historic summit. It's a big week for US tech results, with earnings from Amazon, Microsoft, Facebook, and Alphabet, Google's parent company. And the European Central Bank holds its monetary policy meeting in Frankfurt.
First to the Korean peninsula, where South Korean president Moon Jae-in is preparing for an historic summit with North Korea's leader Kim Jong Un on Friday. A key item on the agenda is an attempt to bring a formal end to the Korean war, a change from ceasefire status to a peace regime.
US President Donald Trump is backing the discussions, which would have been unthinkable last year when North Korea conducted missile tests, detonated its largest-ever nuclear bomb, and said the US was within range of its weapons. The FT's chief foreign affairs commentator Gideon Rachman explains what has changed.
This is indeed a historic moment, and if you think of the atmosphere - even a couple of months ago, when people were worried about a war, maybe even a nuclear war on the Korean peninsula - it feels, for the moment, a lot more hopeful. I think both sides are going in with the world looking at them, and the prospect that perhaps they might be able to agree, if not now, at least set the groundwork for agreeing to a peace treaty.
Part of the significance of this is that in about a month later, probably in early June, Trump will himself meet Kim Jong Un. And if a positive dynamic is set up between the two Koreas, it's then possible to imagine the Americans building on their relationship with North Korea. That then might set the stage for possibly disarmament and even denuclearisation.
Investors will be weighing up the risk of new regulations and higher costs when some of the biggest US tech companies report earnings this week. Regulatory questions hang heaviest over Facebook, which discloses earnings on Wednesday. The social network has already warned of higher costs associated with monitoring content.
Meanwhile, analysts have been focused on a more immediate concern for Amazon and Alphabet, Google's parent company. The profit margins for both have been squeezed by their current levels of investment spending, as our west coast editor Richard Waters explains.
The clearest case of the investment phase that some of these companies are in is at Amazon. Besides the cost of integrating Whole Foods, it's got a whole range of spending on its plate - expanding Amazon web services, the Alexa voice platform, the number of Prime subscribers it has. All of this is going to weigh on profit margins in the first quarter.
But Wall Street has seen this before and is generally confident that when Amazon faces a burst of spending, higher growth is not far behind. Alphabet, on the other hand, is a company that investors are not yet clear they understand where the spending will top out.
I think the real question from the first quarter is how strong are the revenues from YouTube, from cloud computing, these newer businesses that are coming through? And will they be big enough to really cancel out those real worries about costs?
And finally to Frankfurt, where the European Central Bank's policymakers will meet on Thursday for one of their regular monetary policy meetings. The bank is likely to drop some of its crisis-era measures in December. However, there is a chance that the ECB will have to wait a little longer to withdraw the stimulus.
Some of the latest data on the eurozone economy have indicated that that region may be experiencing a slowdown in economic growth. Our Frankfurt bureau chief Claire Jones has more.
2017 was a really, really impressive year for the eurozone's economy. Growth exceeded even the most bullish forecasts.
Now it looks like we might see the reverse of that this year. The latest sentiment indicators and some of the hard data have suggested that growth will be weaker in the first quarter than people had expected. What the European Central Bank is likely to discuss this week is whether what we're seeing is a temporary blip or whether there are some longer term factors at play.
And that's what the week ahead looks like from the Financial Times in London. See you again next time.